Awards & Recognition
Compared to other taxpayers in San Francisco, business entities and international taxpayers are subject to some of the Internal Revenue Code’s most complicated tax provisions. Not only must these taxpayers take care to comply with federal laws such as the Bank Secrecy Act (BSA), the Foreign Account Tax Compliance Act (FATCA), and the Tax Cuts and Jobs Act (TCJA) – in addition, they must think carefully about strategies to mitigate tax liabilities while limiting the burdens of double-taxation, making smart use of tax breaks, and taking other tax issues into consideration.
Whether you own a business in San Francisco, own a foreign company that conducts business in California, or have income and assets located overseas, turn to the San Francisco tax lawyers at the Tax Law Office of David W. Klasing for on-point legal and financial guidance. From tax planning and preparation to audit representation, our team approaches every tax and accounting question with the sort of perspective that can only come from decades of experience.
Why International Tax Problems Arise
International tax risk often starts with ordinary business or family decisions, including:
- A business owner opens or signs on a foreign bank account to pay a vendor or receive foreign payments.
- A taxpayer holds interests in a foreign corporation or partnership, or owns a foreign disregarded entity.
- A family receives foreign gifts or distributions from a foreign trust.
- A taxpayer uses an overseas exchange, wallet provider, or offshore platform for digital-asset activity.
- A foreign national invests in U.S. real estate or starts a U.S. business and misunderstands U.S. withholding and reporting rules.
These matters rarely stay “paperwork only.” The government builds cases from third-party information, bank reporting regimes, information exchange, and digital evidence.
If you have foreign financial accounts, you generally must file an FBAR when the aggregate value exceeds $10,000 at any time during the calendar year, and the FBAR is due April 15 with an automatic extension to October 15.
The Filings That Drive the Most International Tax Exposure
International tax practice turns on information reporting as much as income reporting. Many taxpayers pay the tax later but still face severe penalties for failing to file the required forms.
Common high-risk federal filings include:
FBAR (FinCEN Form 114)
Required for many U.S. persons with foreign accounts above applicable thresholds. FBAR enforcement sits under the Bank Secrecy Act framework and can escalate quickly in willful scenarios.
FATCA Form 8938
Filed with the income tax return and governed by a separate penalty regime from FBAR.
Form 5471 and Related International Entity Forms
Ownership or control of foreign corporations can trigger Form 5471 obligations, with automatic penalty exposure for late or incomplete filings, as well as potential statute-of-limitations consequences.
Forms 3520 and 3520-A
Foreign trust and specific foreign gift reporting can create significant penalty exposure if mishandled.
Form 5472 and Foreign-Owned U.S. entities
Foreign ownership structures can trigger reporting that many taxpayers miss when forming U.S. entities or holding them through offshore arrangements.
PFIC Reporting (Often Form 8621)
Foreign pooled investments and mutual-fund-like holdings frequently create complex and punitive tax outcomes when taxpayers do not plan early.
The IRS can impose significant, form-driven penalties even when the underlying income tax appears modest, including penalties that apply per form and per year and can continue after notice if you do not cure the filing.
2026 Enforcement Realities that Raise the Stakes
Federal enforcement priorities in 2025 reward an early, disciplined compliance strategy.
IRS-CI Continues to Post High Conviction Rates
IRS Criminal Investigation’s FY 2025 reporting shows that when CI develops a case, and the government moves forward, outcomes can be unforgiving.
Data Analytics Drives Selection and Development
The IRS has publicly described analytics-driven enforcement campaigns, including efforts targeting high-income non-filers with significant financial activity.
Digital-Asset Reporting Tightens Further
Treasury and the IRS finalized broker reporting rules that require reporting on Form 1099-DA for transactions on or after January 1, 2025, with phased-in basis reporting for covered transactions starting in 2026. This change strengthens third-party matching and increases audit and investigation risk when taxpayers underreport digital-asset income.
Selecting the Correct Compliance Lane
International tax matters require a threshold decision: did the facts reflect non-willful mistakes or willful noncompliance? That distinction drives the available options and the risk of criminal tax exposure.
Non-Willful Conduct
The Streamlined Filing Compliance Procedures can provide a path to restore compliance when the taxpayer can truthfully certify non-willfulness and meets eligibility criteria.
Willful Conduct or Severe Criminal Exposure
The IRS-CI Voluntary Disclosure Practice exists for taxpayers who need a controlled path to disclose willful noncompliance, cooperate, and pursue a civil resolution that can materially reduce the risk of criminal tax prosecution. Timing controls everything because IRS processes treat disclosures as timely only when the IRS has not already started examining or developing the matter through third-party leads or enforcement activity.
Do not rely on a “quiet disclosure” strategy when willfulness risk exists. Quiet disclosures often increase danger because the government can compare amended filings, third-party records, and digital evidence to build a willfulness narrative.
International Tax Planning for San Francisco Businesses and Professionals
Businesses and individual taxpayers alike are subject to citizenship-based taxation, meaning all U.S. persons and business entities must report worldwide income to the Internal Revenue Service (IRS). In addition to complying with the law by reporting offshore income and assets – including checking accounts, savings accounts, business accounts, and even cryptocurrency – taxpayers must also be alert to tax breaks like the Foreign Earned Income Exclusion (FEIE), which can equate to considerable savings. Finally, businesses must adhere to various intergovernmental treaties, which can be complex and time-consuming for business owners to study. Whether you are an expat with foreign bank accounts, or you represent a multinational business that wishes to open a U.S. branch, our international tax attorneys can help you navigate these issues with greater ease and efficiency.
International tax work in San Francisco often involves federal-only planning and structuring questions, such as:
- Correctly classifying outbound and inbound activities (including whether income is effectively connected, how withholding applies, and what reporting attaches).
- Designing compliant cross-border business operations and payment flows, including recordkeeping that can survive IRS scrutiny.
- Coordinating foreign tax credits, treaty positions where applicable, and reporting for foreign entities to prevent penalties that dwarf the underlying tax.
Inbound and outbound withholding mistakes also create avoidable exposure, including documentation (W-8 series), federal withholding and reporting (for example, Forms 1042 and 1042-S), and real-estate withholding regimes that can surprise foreign investors and U.S. counterparties.
Tax Planning Services for Foreign Companies
Every nation follows a unique system of tax laws, creating an intricate web of international regulations. Obtaining the assistance of a tax planning attorney for foreign companies that will integrate his advice with your offshore counsel improves compliance with these U.S. and International regulations, mitigating the risk of incurring costly fines and penalties. From forming U.S. entities and determining entity selection, to filing timely tax forms, to lessening the financial impacts of transfer pricing regulations, to understanding the potential tax treatment of effectively connected income, the tax professionals at the Tax Law Office of David W. Klasing are focused on limiting your ongoing tax burden, so that your business is in a stronger position to flourish and thrive – no matter where the company originated.
FBAR Compliance for U.S. Expats, Citizens Abroad, and Businesses
Under the Bank Secrecy Act (BSA), all “U.S. persons” – a term which includes not only individual taxpayers like citizens and residents, but also certain businesses, trusts, and estates – are required to file an electronic tax form called FinCEN Form 114, or the “FBAR” (Foreign Bank Account Report), if the following statements apply:
- The taxpayer had financial interest in, or signature authority over, a bank account or financial account (such as a checking account) located overseas.
- The balance of the account, or combined accounts where applicable, exceeded $10,000 during any time in the tax year.
Failing to file an FBAR can have serious civil and even criminal consequences, potentially leading to foreign account audits, federal investigations, and ultimately, prosecution. Even civil cases can terminate with debilitating fines, making swift and effective resolution essential. If you have a foreign bank account anywhere outside the United States, talk to our FBAR tax attorneys about compliance – before it is already too late. Remember, the IRS recently eliminated the Offshore Voluntary Disclosure Program (OVDP), which for many years offered a source of protection for taxpayers who failed to comply with FBAR rules. Now that the OVDP is no longer around to provide a safety net, full and timely foreign account disclosure is especially critical.
Do Not Try to Solve an International Tax Exposure with Your Original Preparer
International tax problems often involve privilege-sensitive facts, including intent, knowledge, instructions to others, and past representations. Accountant-only communications generally do not carry attorney-client privilege. When criminal tax exposure exists, privilege planning can decide whether you keep a matter civil.
When you retain the Tax Law Offices of David W. Klasing, you retain a legal team that includes a dual-licensed Attorney-CPA practice, and the firm’s CPAs are employees of the Tax Law Offices of David W. Klasing. We structure CPA work as part of the legal defense team to maximize attorney-client privilege and work-product protection where the law allows.
San Francisco Tax Attorneys for International Tax Issues
At the Tax Law Office of David W. Klasing, we have established a reputation as a nationally recognized, award-winning tax firm whose skilled team members are committed to delivering an unparalleled level of service. Whether you are starting a business with your spouse or a family member, have questions about reporting worldwide income to the IRS, are concerned about an upcoming tax audit, or need input on the tax considerations that can arise when expanding business operations into the United States for the first time – our trusted tax attorneys are here to offer the guidance you need.
Contact the Tax Law Offices of David W. Klasing in San Francisco For All your International Tax Matters
International tax problems rarely stay “paperwork-only.” Offshore assets, cross-border income, foreign entities, and information returns can create compounding civil penalties and, in willful cases, criminal tax exposure. You should choose counsel who can analyze the law and the numbers at the same time, and who can structure your response strategy to protect you from avoidable admissions. Our firm provides the services of a tax attorney and a CPA for the price of one, which lets you move faster while keeping strategy under attorney direction from day one.
When you hire the Tax Law Offices of David W. Klasing in San Francisco, you get a federal-tax-focused team that handles late filings, back returns, and foreign account disclosures, and that coordinates corrected filings under the Internal Revenue Code, FATCA, and FBAR rules to reduce civil and criminal exposure. We approach international matters as integrated controversies, not isolated forms, because one misstep can trigger audits, summonses, or referrals that force you into a defensive posture.
Clients also choose us for credibility and courtroom readiness. David W. Klasing holds dual licenses as an Attorney and CPA and earned a master’s in taxation. He is admitted to practice before the United States Tax Court and the United States District Court for the Central District of California. The firm holds an A+ rating with the Better Business Bureau, and Mr. Klasing has a 10.0 Avvo rating.
David’s proven proficiency is now available in San Francisco office, providing both legal and federal tax services in one place—at a single hourly billing rate. We have introduced a flexible scheduling option that allows our clients to reserve a 4-hour slot at any of our satellite locations. David W. Klasing will travel to any of our satellite offices to meet with you personally. This option must be preceded by a one-hour phone or GoToMeeting consultation to warrant incurring the travel expenses and opportunity costs. We have designed this service to benefit our clients, with no additional travel expenses added to your bill. Call us at 1-(808)-518-2380 or complete our online contact form today.
To schedule an appointment for a reduced-rate consultation, contact the Tax Law Office of David W. Klasing online, call our offices at (415) 287-6568 or at (800) 861-1295.
